Competitor Analysis. Future Objectives What drives the competitor? Current & Future Strategy Assumptions Themselves Competitors Industry Resources & Capabilities Use previously discussed analytical techniques. (1) Anticipate, plan, & respond to competitor actions and responses
Competitor Analysis • Future Objectives • What drives the competitor? • Current & Future Strategy • Assumptions • Themselves • Competitors • Industry • Resources & Capabilities • Use previously discussed analytical techniques (1) Anticipate, plan, & respond to competitor actions and responses (2) Develop offensive & defensive strategies
Rivalry Among Established Companies • The intensity of competitive rivalry in an industry arises from: • Industry’s competitive structure. • Demand (growth or decline) conditions in industry. • Height of industry exit barriers.
Continuum of Industry Structures Fragmented Many firms, no dominant firm Few firms, shared dominance(oligopoly) Consolidated One firm or one dominant firm (monopoly) Competitive Structure:Number &Relative Competitiveness of Companies
Which Companies are in Strongest / Weakest Positions? • One technique for revealing the different competitive positions of industry rivals is strategic group mapping • A strategic groupconsists of those rivals with similar competitive approaches in an industry
Strategic Group Mapping • Firms in the same Strategic Grouphave two or more competitive characteristics in common . . . • Sell in same price/quality range • Cover same geographic areas • Be vertically integrated to same degree • Have comparable product line breadth • Emphasize same types of distribution channels • Offer buyers similar services • Use identical technological approaches
Strategic Groups Within Industries • Implications of strategic groups • Within an industry, competitors tend to group according to similar strategies that differ from other groups. • The closest industry competitors are those in the group. • The various industry groups are differentially and competitively advantaged and positioned. • Mobility barriers inhibit the movement of competitors from one strategic group to another.
Procedure: Constructing aStrategic Group Map STEP 1: Identify competitive characteristics that differentiate firms in an industry from one another STEP 2: Plot firms on a two-variable map using pairs of these differentiating characteristics STEP 3: Assign firms that fall in about the same strategy space to same strategic group STEP 4: Draw circles around each group, making circles proportional to size of group’s respective share of total industry sales